From the Desk of Ian Culley @IanCulley
Economists, columnists, and pundits are calling for an economic recession and even the possibility of deflation.
Yet the US dollar is consolidating above a critical support zone.
Nothing bearish about that!
In fact, it’s standard price behavior within an ongoing uptrend.
Sure, the pundits might be right. But both scenarios involve a swift decline in the US dollar.
And that’s simply not what’s happening today.
In fact, forex markets are providing new opportunities to buy US dollars and sell other major currencies…
Check out the EUR/USD pair pulling back to a logical resistance level:
If you missed selling the breakdown in September, the market is giving you another shot.
The EUR/USD is reversing lower following a retest of the May pivot lows.
We can define our risk at the intraday day high of 1.0694 with an initial downside target at approximately 1.0350.
It’s not the best risk/reward profile (risking 100 pips to gain 250 pips). But the EUR/USD could reach parity (approximately 600 pips reward) in the coming months if the US dollar index embarks on the next leg higher.
The US dollar could roll over at any point, of course. I will update my priors and react accordingly if and when it does.
I don’t trade the news or the economy. And I certainly don’t base my trading decisions on someone else’s opinion of what might happen in Q3 of 2024.
I trade price at the right side of the chart. And these charts continue to show US dollar strength.
Stay tuned.
Thanks for reading.
Let me know what you think. I love hearing from you!
And be sure to download this week’s Currency Report!
Premium Members can log in to access our Weekly Currency Report. Please log in or start your risk-free 30-day trial today.
Be the first to comment